Describe the role of financial analysis in health services capital budgeting decisions

Describe the role of financial analysis in health services capital budgeting decisions. ** Read Chapters 14 & 15 from Gapenski, L. C. (2012). Healthcare finance: An introduction to accounting and financial management. Chicago, Ill:

 

Chapter 14 explains how managers use project classifications and post-audits in the capital budgeting process. In addition, the chapter covers the role of financial analysis in health services capital budgeting decisions and key issues involved in cash flow estimation. Finally, the chapter covers the usefulness and methods applied in breakeven and profit – ability analyses and the basic capital budgeting analyses.

Chapter 15 Describe the three types of risk relevant to capital budgeting decisions and the advantages and disadvantages of sensitivity analysis. The chapter also covers the advantages and disadvantages of scenario analysis and how to conduct a project risk assessment. Finally, the chapter covers risk in the capital budgeting decision process.

Read Chapter 8 from Gapenski, L. C. (2012). Healthcare finance: An introduction to accounting and financial management. Chicago, Ill:

Chapter 8 explains the importance of proper cost allocation to health services organizations. The chapter also covers cost driver, and the characteristics of a good driver as opposed to a poor one, and primary method used to allocate overhead costs.**

This Competency Assessment assesses the following outcome(s):

HS440M6-6: Explain the methodologies used in preparing budgets for health care organizations.

Utilizing your textbook and the Library:

Describe the role of financial analysis in health services capital budgeting decisions.

By answering the following questions:

• Explain the key issues involved in cash flow estimation?
• Describe the usefulness and methods applied in breakeven and profitability analysis?
• What is the role of financial analysis in capital budgeting decision making within for-profit firms?
• Why is project financial analysis important in not-for-profit businesses?
• Explain the four steps in capital budgeting financial analysis?
• Why should projects with high expected profitability be viewed with some skepticism?

Minimum Submission Requirements

• The minimum page limit is 3 pages or 900 words.
• The maximum page limit is 5 pages or 1500 words.
• Information should be summarized in your own words with appropriate APA formatting and citation style of in-text citations in the body of the text to acknowledge the source(s) of information.
• Include at least one reference. The course textbook may count towards the reference requirement for this Assignment. All references will follow APA format.
• Your work should display superior content, organization, style, and mechanics.
• Respond to the questions in a thorough manner, providing specific examples of concepts, topics, definitions, and other elements asked for in the questions. Your submission should be highly organized, logical, and focused.
• Your submission must be written in Standard English and demonstrate exceptional content, organization, style, and grammar and mechanics.
• Your submission should provide a clearly established and sustained viewpoint and purpose.
• Your writing should be well ordered, logical and unified, as well as original and insightful.
• A separate page at the end of your submission should contain a list of references, in APA format. Use your textbook, the Library, and the internet for research.
• Be sure to cite both in-text and reference list citations where appropriate and reference all sources. Your sources and content should follow proper APA citation style. Review the writing resources for APA formatting and citation found in Academic Tools. Additional writing resources can be found within the Academic Success Center.
• Your submission should:
  • include a cover sheet;
  • be double-spaced;
  • be typed in Times New Roman, 12 -point font;
  • include correct citations
  • be written in Standard English with no spelling or punctuation errors; and
  • include correct references at the bottom of the last page.

Describe the role of financial analysis in health services capital budgeting decisions

 

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